Business News of 2014-02-15

Ghana aims to stop US$1b rice, food imports – Mahama

President John Mahama says his government is aiming at shoring up Ghana’s rice production capacity and eventually becoming a net-exporter rather than an importer.

Ghana currently spends about US$600m annually to import rice.

The West African country spends an additional US$400m annually to import sugar, tomatoes, vegetable cooking oil, frozen fish, poultry and wheat.

As part of long term measures toward reducing pressure on the local currency, President Mahama told the BBC that his government is targeting a reduction in the US$1b imports of food by developing the local capacity to produce more of them.

“We must look at the basic structure of our economy which is heavily import dependent and also dependent on the export of a narrow band of primary products. Until we change the structure of our economy in order to address the trade imbalance that we have between exports and imports, we’ll continue to have the pressure on the economy”, Mr Mahama said.

According to him, it is imperative for Ghana to “create more pillars for the economy to stand on”.

“It can’t continue to stand on only gold, cocoa and export of natural resources”, he said.

Mr Mahama also said his Government intends diversifying the structure of the economy by going beyond just exporting oil and rather creating a midstream and downstream petrochemical industry.

The Ghanaian currency – Cedi – has lost about 7% in value against the dollar since January this year. The Central Bank has pumped into the economy, US$20 million toward shoring up the value of the cedi.

The Bank has also announced a string of forex control measures toward the same end.

Economists, however, believe until Ghana produces and exports more than it imports, the recurrent fall of the cedi will persist.